Expansionary Fiscal Policy

question 42

Multiple Choice

Expansionary fiscal policy

• A)increases aggregate demand.
• B)decreases aggregate demand.
• C)increases short-run aggregate supply.
• D)increases long-run aggregate supply.
• E)A, C, and D are correct.

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Definitions:

Labor-Force Participation

The proportion of the working-age population that is working or actively looking for work.

Prime Working Age

The age range typically considered to be the most productive and economically active period in an individual's life, often defined as 25 to 54 years.

Teenagers

Young people whose age falls within the range from 13 to 19 years.

Labor-Force Participation

The fraction of the population of working age that is engaged in employment or in the search for a job.